“20. Malcolm Company uses direct labor hours as a base for applying predetermined factory overhead to production jobs. On September 1, the estimates for the month were: Factory overhead $17,000 Direct labor hours 13,600 During September, the actual production figures were: Factory overhead $18,500 Direct labor hours 12,000 The cost records for September will show a. Overapplied overhead of $3,500 b. Underapplied overhead of $2,000 c. Overapplied overhead of $1,500 d. Underapplied overhead of $3,500”,”4Predetermined rate = Estimated MOH/ Estimated DLHPredetermined rate = 17,000 = $1.25/DLH 13,600Applied MOH = DLH x predetermined rateApplied MOH = 12,000 x 1.25 = $15,000Compare to $18,500: Underapplied by 3

“20. Malcolm Company uses direct labor hours as a base for applying predetermined factory overhead to production jobs. On September 1, the estimates for the month were: Factory overhead $17,000 Direct labor hours 13,600 During September, the actual production figures were: Factory overhead $18,500 Direct labor hours 12,000 The cost records for September will show a. Overapplied overhead of $3,500 b. Underapplied overhead of $2,000 c. Overapplied overhead of $1,500 d. Underapplied overhead of $3,500”,”4Predetermined rate = Estimated MOH/ Estimated DLHPredetermined rate = 17,000 = $1.25/DLH 13,600Applied MOH = DLH x predetermined rateApplied MOH = 12,000 x 1.25 = $15,000Compare to $18,500: Underapplied by 3

500″